National Healthcare (NHC) risk factors, FY2024 10-K

Risks Relating to Our Operations

1. 01The industry trend toward value-based purchasing may negatively impact our revenues
2. 02By undertaking to provide management services, advisory services, and/or financial services to other entities, we become at least partially responsible for meeting the regulatory requirements of those entities
3. 03We provide management services to skilled nursing facilities and other healthcare facilities under terms whereby the payments for our services are subject to subordination to other expenditures of the healthcare facility
4. 04Federal minimum staffing mandates may adversely affect our labor costs, ability to maintain desired levels of patient census and profitability
5. 05Disasters and similar events, which may increase as a result of climate change, may seriously harm our business
6. 06Future acquisitions or new developments may be difficult to complete, use significant resources, or be unsuccessful and could expose us to unforeseen liabilities
7. 07Upkeep of healthcare properties is capital intensive, requiring us to continually direct financial resources to the maintenance and enhancement of our physical plant and equipment
8. 08We are defendants in significant legal actions, which are commonplace in our industry, and which could subject us to increased operating costs and substantial uninsured liabilities, which would materially and adversely affect our liquidity and financial condition
9. 09If we fail to compete effectively with other health care providers, our revenues and profitability may decline
10. 10Possible changes in the case mix of patients and payor mix may significantly affect our profitability
11. 11The effects related to any potential future pandemic, epidemic, or infectious disease outbreak could adversely impact our business and future results of operations and financial condition
12. 12We are permitted to incur substantially more debt, which could further exacerbate the risks described above

Risks Related to Government Regulation

1. 13We conduct business in a heavily regulated industry, and changes in, or violations of regulations may result in increased costs or sanctions that reduce our revenue and profitability
2. 14Our business may be impacted by healthcare reform efforts
3. 15We are required to comply with laws governing the transmission and privacy and security of health information
4. 16We are subject to employment-related laws and regulations which could increase our cost of doing business and subject us to significant back pay awards, fines and lawsuits
5. 17Our business is subject to a variety of federal, state and local environmental laws and regulations
6. 18We are subject to federal and state income taxes. Changes in tax laws and regulations or the interpretation of such laws could adversely affect our position on income taxes and estimated income liabilities

Risks Related to Our Structure and Public Company Compliance

1. 19Increasing costs of being publicly owned are likely to impact our future consolidated financial position and results of operations
2. 20Provision for losses in our financial statements may not be adequate
3. 21Implementation of new information technology could cause business interruptions and negatively affect our profitability and cash flows
4. 22We depend on the proper function and availability of our information systems
5. 23Cybersecurity risks could harm our ability to operate effectively
6. 24We may not be able to meet all our capital needs
7. 25Our stock price is volatile and fluctuations in our operating results, quarterly earnings and other factors may result in declines in the price of our common stock
8. 26We may not be able to pay or maintain dividends and the failure to do so would adversely affect our stock price